Deutsche Bank on Monday cut India’s BSE benchmark Sensex target to 28,000 from 31,000 earlier citing concerns over global growth. This is the second time the global financial services major has revised the Sensex target in 3 months. It had earlier trimmed its year-end Sensex target to 31,000 in June on account of a more muted environment for foreign inflows and earnings cuts in preceding two quarters.

Sensex on Monday rebounded over 96 points to 25,706.87 in early trade, reversing its two-day losing trend on the back of positive IIP numbers for July.

Deustche Bank said that combination of commodity deflation, sharp compression in global trade, deep emerging market(EM) currency depreciation and dollarisation of EM debt has raised the risks of an EM contagion.

It further added that cross border loans and debt securities to EM at $5.7 trillion could lead to fast paced tightening of credit.

Nitasha Shankar, vice president, research, YES Securities, said, “Global markets are cautious ahead of the US Fed meeting. Largely the expectations are that the US Fed will not hike rates.”

The global financial services major also said that India looks relatively better placed due to government reforms and low levels of external debt relative to nominal its GDP.